UAW, Ford in Talks Over Retiree Health Benefits

The United Auto Workers and Ford Motor Company officials have begun discussions about potential concessions on retiree health benefits, union President Ron Gettelfinger said on Wednesday, the Detroit Free Press reports. Ford spent $3.1 billion on health care in 2004 and expects to spend $3.5 billion this year. The Ford U.S. health plan covers 550,000 salaried and hourly employees, retirees, dependents and spouses (Ellis, Detroit Free Press, 11/17). Last week, UAW ratified an agreement with General Motors that would require union retirees to pay monthly health insurance premiums and annual deductibles to help reduce company health care costs (Kaiser Daily Health Policy Report, 11/14). The agreement, which would expire in September 2011, requires approval by the U.S. District Court for the Eastern District of Michigan. Ford and the Chrysler Group likely will seek similar concessions on retiree health benefits from UAW. On Wednesday, Gettelfinger said, "We will do an in-depth analysis at Ford before entering into discussion, which are under way now." Gettelfinger said UAW has not begun discussions with Chrysler and has focused on talks with Ford. Ford spokesperson Tom Hoyt said that the company and UAW "continue to have very private and constructive discussions to address Ford's health care cost reduction needs." Chrysler spokesperson David Elshoff said that the company will seek an agreement similar to the one reached between UAW and GM. "Based on the tradition of pattern bargaining, we would expect something similar," he said (Detroit Free Press, 11/17).

Commentary
"It's time the nation decouple" health care from employment, Robert Reich, former U.S. secretary of labor and a professor of social and economic policy at Brandeis University, said in a commentary on APM's "Marketplace" on Wednesday. Employers offer health insurance to workers because its function as an untaxed form of payment makes it "attractive" to both parties and although it is "waning," employer-sponsored health insurance coverage remains the largest tax break in the federal tax system, Reich said. According to Reich, employer-sponsored health care is a "bizarre" system, "completely at odds" in an economy without job security, "distorts" the labor market by preventing workers from changing jobs for fear of losing or reducing benefits, and "invites gaming" by employers to reduce the number of dependents on their plans. The $126 billion annual tax subsidy for employer-sponsored health insurance should be used as a down payment for a "universal and affordable" health care system available to all U.S. residents regardless of where they work or how much they earn, Reich concludes (Reich, "Marketplace," APM, 11/16).

The complete segment is available online in RealPlayer.